MEASURING CLIMATE AND CLIMATE POLICY UNCERTAINTY FOR PAKISTAN

Ateeb Akhter Shah SYED*, Mohsin WAHEED** and Sarah SALEH***

This paper measures climate policy uncertainty and climate uncertainty for Pakistan using news from leading English newspapers. Multiple spikes are visible in the indices, which capture catastrophic events due to climate change and climate-related policies. For example, all the indices capture major events such as the floods of 2010 and 2022, the launch of the National Adaptation Plan, National Electric Vehicle Policy Implementation, and the launch of the National Action Plan for Combating Desertification, to name a few. This paper also provides the first-of-its-kind discussion of climate adaptation versus climate mitigation for an emerging market economy. Using a vector autoregressive model for our empirical analysis, we show that an increase in CO2 emissions increases economy-wide climate uncertainty significantly, while a shock to climate policy uncertainty leads to a significant decrease in CO2 emissions. The Boston Consulting Group estimated that 80 per cent of Pakistan’s climate financing was directed towards mitigation efforts. Although Pakistan has initiated several policies towards climate mitigation, this paper recommends that it still needs to work on measures such as operationalizing carbon pricing, public-private partnerships for green infrastructure, and large-scale energy efficiency programs.